Nyheter
Pro-Crypto Presidency, New All-Time Highs, What’s Next?
• The crypto market jumped 17% following the presidential election, sparking renewed momentum.
• Bitcoin and Ethereum typically rally before Inauguration Day, with gains in 2020 exceeding 150% and 250%, respectively.
• Bitcoin crossed $82K, Sui surpassed $3, and Solana nears new highs driven by its DeFi-ecosystem, boosting market optimism.
• Ethereum, Cardano, and Toncoin are rallying but remain well below their all-time highs, hinting at significant upside potential. Cardano, in particular, surged nearly 100% following rumors that founder Charles Hoskinson may collaborate with U.S. regulators on crypto policy.
In just a week, the U.S. presidential election has sparked a crypto market rally, pushing total market capitalization up by 17% to $2.7T —a $400B surge. Leading the charge, Bitcoin rocketed almost 20% to an all-time high of more than $82K, while Ethereum broke out of its months-long slump, jumping by over 30%. Market optimism is running high as investors anticipate a smooth transition between the Biden and Trump administrations, with upcoming monetary policy shifts and a mounting geopolitical landscape adding to the momentum.
Figure 1 – Crypto Market Capitalization in 2024
Source: Coingecko, 21Shares
Before diving into the factors shaping this market cycle, let’s take a closer look at how each crypto sector has performed in this historic week. Leading the charge are memecoins, growing by more than 50%, and capturing significant attention, driven largely by Solana’s high speeds. Decentralized Finance (DeFi) has also rallied on speculation around favorable regulatory changes, which we broke down in our last newsletter in more detail.
Figure 2 – Market Capitalization Growth Across Sectors, Bitcoin and Ethereum
Source: Artemis, 21Shares
How Does The Market React Around Elections?
The pre-election period has historically put pressure on crypto markets, with Bitcoin and Ethereum often facing declines as uncertainty peaks, as shown in Figure 3. This year saw an even sharper downturn, with Bitcoin dropping nearly 7% in the days leading up to the election. This steeper decline likely reflects the unprecedented attention on the crypto industry, prompting many market participants to de-risk ahead of the event.
Figure 3 – Bitcoin and Ethereum Performance Leading up to Elections
Source: Coingecko, 21Shares
However, as shown in Figure 4, cryptoassets tend to rally in the months following an election—regardless of the political outcome. With a pro-crypto president-elect and a Congress now dominated by crypto-friendly representatives, market sentiment seems primed for a potential rebound. Historically, Bitcoin has averaged a November return of 44%, with particularly strong performance in years that coincide with both a U.S. election and a Bitcoin halving.
Figure 4 – Bitcoin and Ethereum Performance Since Elections
Source: Coingecko, 21Shares
Bitcoin and Ethereum have historically seen significant gains leading to Inauguration Day on January 20. For instance, in 2020, Ethereum surged by over 250%, and Bitcoin rose by more than 150% during this period. January following an election is often particularly favorable for Ethereum, likely as capital shifts from Bitcoin to other assets down the tail.
Figure 5 – Bitcoin and Ethereum Performance in January Post-Elections
Source: Coinglass, 21Shares
Let’s examine how the market is shaping up this time and explore what to expect in the months ahead.
Market Dynamics Post U.S. Election: Current Leaders
Following the election, several key cryptoassets are nearing or setting new all-time highs, as illustrated in Figure 6. Bitcoin reached a fresh all-time high (ATH) of approximately $74K on election night, then surged past the $80K mark over the weekend, maintaining its upward momentum. Solana, while not yet at a new high, is only 20% away after rallying 34% post-election. Sui also hit a new ATH, rising 66% since Election Day when it traded nearly $2B. As Sui continues to capture market share, particularly by appealing to a new wave of users with consumer-facing applications, it warrants close monitoring as a potential satellite investment alongside Solana.
Figure 6 – Major Cryptoassets Nearing All-Time Highs
Source: Coingecko, 21Shares
Despite several assets already nearing or surpassing ATHs, key indicators suggest there’s still room for growth in this cycle, as post-election rallies often build momentum in the following months.
Institutional demand for Bitcoin surged post-election, driven by a pro-crypto administration’s victory. In the three days leading up to the election, net outflows totaled $755M as markets were risk-averse. However, once results were announced, inflows rebounded sharply, with nearly $1.5B in net flows on Thursday alone—the highest single-day inflow of the year and roughly equivalent to all miner rewards issued since the beginning of Q3!
Figure 7 – Bitcoin Price and Net BTC ETF Flows
Source: Glassnode, 21Shares
That said, institutional adoption is still in its early stages, with broader interest on the horizon. The introduction of BTC ETF options enables hedge funds to deploy more sophisticated strategies, boosting market liquidity and accelerating the growth of Bitcoin’s derivatives market—currently only 5% of Bitcoin’s market cap, compared to 10-15x in traditional assets. Additionally, as wirehouses and RIAs complete their one-year due diligence early next year and begin actively allocating client portfolios, Bitcoin could follow a post-election trajectory similar to 2020, as shown in Figure 4.
We may see further capital flowing into Bitcoin because of the easing monetary conditions emerging worldwide. Last Thursday, the Fed cut rates by 25bps, following similar moves from the Bank of England, with the ECB likely to follow suit. This rate-cutting trend is driving an indirect expansion in M2 money supply globally, increasing liquidity in the financial system.
Figure 8 – Bitcoin Performance vs. M2 Supply Growth
Source: BGeoMetrics, 21Shares
Bitcoin acts as a ”liquidity sponge,” attracting capital during periods of monetary expansion, as shown in Figure 8. When central banks increase M2 through rate cuts or quantitative easing, Bitcoin initially sees speculative inflows as a high-growth asset. As inflation concerns build, its role as an inflation hedge gains traction, creating a dual response to rising liquidity. With looser monetary conditions emerging, such as in 2020, Bitcoin could be primed to push past the six-figure mark.
Bitcoin has also shown a solid tendency to rebound in response to market uncertainties, as illustrated in Figure 9 below. While President Trump has demanded a de-escalation of the conflict in the Middle East by January 20, negotiations have stalled, with Qatar suspending its mediation role.
Figure 9 – Bitcoin Price Performance in Face of Macroeconomic Uncertainty
Source: Yahoo Finance, 21Shares
This resilience highlights Bitcoin’s appeal as a sovereign, censorship-resistant asset in times of crisis. With Donald Trump pledging to establish a strategic Bitcoin reserve and support U.S.-based mining, Bitcoin’s fundamentals appear well-positioned to sustain upward momentum in this post-election cycle despite ongoing tensions in the Middle East.
As a result of this year’s events, Bitcoin’s market dominance has surged to around 57%, as shown in Figure 10, its highest level since March 2021. However, a recent 3% dip over the weekend hints that other assets are beginning to lead the charge, signaling a shift toward broader market diversification as investors start allocating capital across the wider crypto landscape.
Figure 10 – Bitcoin Market Capitalization Dominance
Source: Coingecko, 21Shares
As shown in Figure 11, Solana has been performing exceptionally well this year, with momentum expected to carry through the current cycle. It recently surpassed the $217 mark, setting a new year-to-date high. This surge has been driven by strong retail engagement and a vibrant DeFi sector, which initially catalyzed Solana’s growth earlier in the year. Now, with a resurgence in SPL-based tokens, Solana’s ecosystem appears poised to continue attracting capital and retail interest, supporting its upward trajectory.
Figure 11 – Solana Performance
Source: Coingecko, 21Shares
Memecoins have proven to be an effective gateway for onboarding retail investors, with much of this activity centered on the Solana blockchain. Their recent surge has pushed Solana’s DeFi sector to new heights, as many of these tokens are actively traded on decentralized exchanges (DEX) like Raydium. In November, Solana’s DEXs collectively surpassed $34B in trading volume—nearly double Ethereum’s. Raydium alone has outperformed Uniswap in both transaction volume and fee generation, underscoring Solana’s growing dominance in DeFi and the strong appeal for SPL-based tokens among retail traders
Figure 12 – Solana Decentralized Exchange Volume
Source: Dune, 21Shares
The elections sparked a significant rally across DeFi tokens, particularly for Raydium, as shown in Figure 13 below. This momentum reflects the anticipation of more straightforward, favorable regulatory conditions. According to data from StandWithCrypto:
• In the House of Representatives, 268 pro-crypto candidates vs. 122 anti-crypto candidates
• In the Senate, 19 pro-crypto candidates vs. 12 anti-crypto candidates.
This shift toward a pro-crypto legislative body is expected to be a tailwind for DeFi, alleviating past regulatory pressures faced by projects like Uniswap, which had previously been targeted by the SEC. Additionally, President-elect Trump’s DeFi initiative, World Liberty Financial, built on Aave, signals potential political support that could reduce legal risks, creating a more supportive regulatory environment for innovation across the sector.
Figure 13 – DeFi Related Projects Performance During Q3
Source: Coingecko, 21Shares
Benefitting from more favorable conditions, several DeFi projects are on the verge of transformative changes. For example, Uniswap’s upcoming launch of its DeFi-focused chain, Unichain, is expected to strengthen UNI’s investment case by allowing token holders to capture revenue that has historically gone to Ethereum—totaling over $3.5B since inception.
While some key assets are soaring to new highs, others remain well below their peaks, presenting intriguing opportunities as capital rotates. We’ll examine these recently underperforming crypto assets and explore the factors that may drive their recovery in the months ahead.
Market Dynamics Post U.S. Election: Current Laggers
Several cryptoassets remain well below their all-time highs, with Ethereum, Cardano, and Toncoin down approximately 35%, 84%, and 36%, respectively, as shown in Figure 14. Yet, these assets have rallied impressively since the election—in fact, no major cryptoasset has declined since Election Day. Ethereum crossed the $3K mark for the first time since February, Cardano nearly doubled with a 100% surge, and Toncoin rebounded with a 22% gain. Recent market activity suggests that these market laggers—especially Ethereum and Cardano—have faced challenges this year.
While The Open Network (TON) is gaining, it is still recovering from Telegram founder Pavel Durov’s August arrest—and may gain stronger traction later in the cycle, as the market currently favors chains with established DeFi ecosystems. With its Web2 integration and user-friendly access via Telegram, TON is well-positioned to attract crypto entrants—an advantage that could become more valuable as retail interest reignites in the latter stages of the cycle.
Figure 14 – Major Cryptoassets Far Away From All-Time Highs
Source: Coingecko, 21Shares
Ethereum has struggled to keep pace with Bitcoin this year, particularly as Bitcoin has crossed the $70K mark five times, with Ethereum lagging each time. This underperformance reflects Ethereum’s challenging transition as it adapts to a new business model where much of its activity is offloaded to Layer 2 (L2) networks. These networks rely on Ethereum for security but handle transactions off-chain, reducing fees and congestion on Ethereum’s mainnet. However, this efficiency comes at a cost: L2s pay minimal fees to Ethereum, raising concerns about the mainnet’s long-term economic sustainability.
Nevertheless, Ethereum’s recent rally to $3.2K suggests it may have found new tailwinds. Following the election, the BTC-to-ETH ratio hit a new high for the year, indicating that Bitcoin had significantly outpaced Ethereum. As shown in Figure 15, this ratio has started to decline, signaling a potential shift in capital from Bitcoin toward Ethereum and other alternatives.
Figure 15 – Bitcoin to Ethereum Ratio
Source: Coingecko, 21Shares
We expect Ethereum’s growth to continue its momentum through next year despite recent challenges. Ethereum may implement revenue-sharing agreements with L2s, establishing minimum fees that L2s pay back to the mainnet—thereby strengthening the contributions to Ethereum’s core ecosystem. Additionally, more Layer 1s, like Celo, are shifting to operate as Ethereum L2s, which will increase demand for Ethereum’s block space.
Meanwhile, traditional financial and crypto-native firms are accelerating their L2 adoption, bringing new users and capital onto Ethereum. Coinbase’s L2, Base, has been highly successful, amassing nearly $3B in TVL and over 1M users, with Kraken recently following suit. Rumors of Sony launching its L2 are also circulating. These initiatives unlock consumer-facing applications, help address Ethereum’s disjointed ecosystem, and spark renewed interest from both crypto and traditional players.
Despite the recent launch of Ethereum ETFs, institutional inflows have significantly trailed behind Bitcoin’s. Net flows into Ethereum ETFs total just $137M, a stark contrast to Bitcoin’s $24B. This discrepancy is partly due to Ethereum’s more complex value proposition as a platform for decentralized applications, which may take longer for investors to embrace fully. Additionally, these ETFs have not activated staking, limiting their appeal to investors interested in yield-generating assets.
However, recent signs indicate growing institutional interest in Ethereum. Since Election Day, Ethereum has seen net inflows of $196M, bringing its cumulative ETF flows into positive territory since launch, as shown in Figure 16. With anticipated regulatory clarity, TradFi integrations on the horizon, and potential improvements to Ethereum’s mainnet revenue model, Ethereum could be poised for a revival.
Figure 16 – Ethereum ETF Net Flows
Source: Glassnode, 21Shares
Moving from Ethereum to another lagging asset, Cardano has seen renewed interest as it enters its Voltaire era, following the Chang Hard Fork (covered here). Announced in late October, Cardano is pivoting to become a Bitcoin L2, and this shift aims to leverage Cardano’s smart contract capabilities to enhance Bitcoin’s functionality. Under this setup, Cardano maintains its Layer 1 independence but works alongside Bitcoin, enabling both networks to capitalize on their convergence.
Additionally, Cardano has recently rallied on news that founder Charles Hoskinson plans to assist the new administration in developing crypto-friendly policies in the U.S. With Input Output, Cardano’s development company, setting up a policy office in Washington, Cardano’s position in U.S. regulatory discussions is set to strengthen. At 80% below its ATH, Cardano presents a strategic entry opportunity for investors.
Post-election, several leading cryptoassets are approaching new all-time highs, while others remain far from their peaks, presenting intriguing opportunities. Bitcoin reached over $80K over the weekend, while Solana and Sui surged significantly. However, Ethereum, Cardano, and Toncoin—still well below their all-time highs—have shown impressive rallies, signaling potential growth.
What’s happening this week?
Research Newsletter
Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com
Disclaimer
The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.
The crypto market has surged past $3T in total market capitalization, with smart-contract platforms leading the charge as risk appetite expands beyond Bitcoin. In particular, lean, cost-efficient blockchains have emerged as a key driver for onboarding users and boosting on-chain activity, as reflected in Figure 1.
• Solana soared 57% since the election, driven by memecoin-fueled retail interest and unprecedented DeFi activity, generating more revenue than Ethereum.
• Sui reached a new all-time high (ATH) near $4, also boosted by its gaming device pre-launch and consumer-friendly features.
• Aptos is gaining momentum for institutional-grade solutions like tokenization and payments, contributing to a recent price surge of 71%.
Figure 1 – Sector Price Performance Since Election Day
Source: Artemis, 21Shares
Given the proliferation of Layer 1s (L1s), it invites a closer examination of how the industry reached this point.
• Each L1 tackled the blockchain trilemma differently. While Bitcoin and Ethereum prioritized decentralization and security, later iterations focused on optimizing scalability.
• Ethereum’s first-mover advantage cemented the EVM as the standard for blockchain platforms, driving widespread adoption. However, its limitations spurred innovation, leading to the development of new virtual machines such as Solana’s SVM.
Despite these differences, each L1 plays a critical role in the on-chain ecosystem, tailored to unique use cases based on their architecture and features outlined in Figure 2 below.
Figure 2 – Technical Breakdown of Layer 1 Landscape
Source: Artemis, 21Shares
Below, we outline the unique strengths of each network, highlighting how they address various use cases in the order of their launch.
Ethereum – July 2015
The leading platform for decentralized applications (dApps) and a pioneer in smart-contract technology, as the first blockchain to introduce smart contracts.
• Ethereum laid the foundation for dApps and DeFi, commanding the highest liquidity with a Total Value Locked (TVL) of $60B.
• Its focus on decentralization and security, with more than 1M validators, makes it a trusted platform for tokenized government securities, totaling over $1.5B in assets.
• Ethereum hosts over 4,000 dApps, including prominent DeFi platforms like Uniswap and Aave, leveraging its unmatched network effects as the most widely adopted blockchain. While Layer 2 solutions enhance speed and efficiency, they have also introduced fragmentation, leading to reduced revenue.
Cardano – September 2017
The platform sets itself apart with a rigorous, research-driven approach to blockchain development.
• Introduced formal verification for smart contracts and enhanced Ethereum’s Proof-of-Stake (PoS) with Delegated Proof of Stake (DPoS), democratizing transaction validation.
• Collaborates with governments like Ethiopia to deploy Atala PRISM, enabling digital IDs that improve access to education and financial infrastructure in underserved regions. The network also promoted a transparent and efficient aid distribution system.
• Cardano’s growth has been hindered by slow development, a lack of EVM compatibility, and the absence of on-chain governance, resulting in a modest $456M TVL. Recent upgrades like the Chang Hard Fork foster a community-driven network, while the BitcoinOS integration will boost cross-chain utility by facilitating ADA-powered Bitcoin transactions.
Solana – March 2020
The network prioritized scalability powered by their innovative dual consensus model combining Proof of History (PoH) and PoS. With the ability to process nearly 3,000 transactions per second (TPS), Solana stands as one of the fastest blockchains available.
• This month, Solana’s DEX trading volume exceeded Ethereum’s by $40B, fueled by its efficient, low-cost blockchain and propelled by a dynamic DeFi ecosystem rich in retail-driven activity. This surge in trading volume has been a key driver behind the growth in Solana’s TVL, now reaching $8.3B.
• Solana powers decentralized physical infrastructure networks (DePIN) like Helium (broadband), Hivemapper (mapping), and Render (3D rendering), which demand high-speed, low-cost transactions at scale. Solana’s fast and efficient blockchain provides the necessary infrastructure for these applications to operate smoothly and cost-effectively.
• For Solana to deepen its integration with traditional finance—supported by PayPal’s PYUSD, which processes $30B, along with partnerships with Visa and Shopify—it must address ongoing network reliability issues, especially as its network experienced downtime once this year and multiple times over the past three years. The Firedancer validator client, capable of over 1M TPS on testnet, is positioned to reduce outages and enhance reliability, solidifying Solana’s role as a top solution.
Avalanche – September 2020
An EVM-compatible blockchain characterized by its subnet architecture, which enables customizable, permissioned networks connected to the Avalanche mainnet.
• Avalanche’s scalable subnet architecture enables customizable, permissioned networks with flexible gas fees, data privacy, and validator incentives. The Avalanche9000 upgrade enhances this with shared liquidity, lower validator costs, and full customizability, including geo-restrictions, making it ideal for tailored enterprise blockchain solutions.
• Avalanche’s Evergreen Subnets have attracted major TradFi players, including Franklin Templeton, which tokenized its $420M government money fund, as well as Citibank and Wellington Management exploring financial applications.
• Avalanche supports a wide range of industries, from Deloitte’s federal disaster reimbursement platform—designed to improve claim speed and transparency—to gaming projects like Shrapnel, which is built the GUNZ subnet. Its EVM compatibility and robust ecosystem pushed its TVL past $1B.
The Open Network (TON) – September 2021
A high-throughput blockchain designed for seamless user onboarding, TON aims to deliver a Web3 WeChat-like experience. Its strategic partnership with Telegram, which boasts 900M monthly active users, positions it as a key driver of mainstream blockchain adoption.
• TON’s Mini Apps act as a gateway to its on-chain ecosystem, leveraging projects like Hamster Kombat, which peaked at nearly 300M users, to drive retail adoption. However, its $300M TVL reflects a nascent financial ecosystem focused on simpler, retail-friendly use cases, leaving it comparatively underdeveloped in DeFi.
• Processing nearly 28M transactions this month, TON is strongly positioned to drive blockchain-based payments. Its recent USDT integration, surpassing $1B in supply within just seven months, further reinforces its potential in this space.
• Despite recent setbacks at Telegram, which operates independently from TON, the network’s growth this year underscores its strong potential. With scalable infrastructure and a vast addressable market, TON is well-positioned to onboard the next wave of users.
Aptos – October 2022
A high-performance blockchain leveraging the Move programming language, which was developed by Meta for their Diem project. Move prioritizes security and scalability, making it a strong contender for institutional use cases.
• Parallel processing enables sub-second settlement times and a theoretical throughput of 160K TPS, ensuring the performance needed for enterprise-grade applications.
• Aptos, led by ex-executives of Meta’s Diem project, is bringing institutions on-chain. Its credibility is bolstered by partnerships with TradFi giants like Microsoft, Franklin Templeton, and NBC Universal, alongside institutional-grade use cases such as Ondo’s tokenization platform. Alongside a growing DeFi ecosystem, which we’ll explore in detail later, these efforts have propelled its TVL to nearly $1B.
• Aptos streamlines Web3 access with keyless accounts, passwordless authentication, and transaction previews. Its support for emerging markets includes cost-efficient devices like the Jambo Phone, preloaded with blockchain tools. By combining advanced scalability with user-first design, Aptos is well-positioned for this cycle.
Sui – May 2023
Aptos’ twin is also a high-performance blockchain designed to deliver Web2-like simplicity to Web3. Also built on the Move programming language, it focuses on consumer-facing applications rather than institutional use cases.
• Sui caters to retail users with innovations like SuiPlay0X1, a gaming device bridging Web3 and traditional gaming. This focus has positioned Sui as a leader in consumer-facing dApps.
• Sui pairs sub-second finality and parallel processing with intuitive features like zkLogin for wallet creation via Google or Face ID, gasless interactions covered by apps, and QR-based payments with zkSend. By combining scalability with a user-friendly experience, Sui is primed to drive retail adoption and bridge the gap between Web2 and Web3, onboarding the next generation of crypto users.
• The recent launch of its Ethereum bridge and USDC support has significantly boosted Sui’s DeFi ecosystem, driving its TVL beyond $1.5B. This growth aligns with Sui’s recent ATH, just shy of $4.
We’ve just highlighted each blockchain’s unique features and selling points; now, let’s examine how these translate into real on-chain activity. We’ll assess key metrics like active addresses, decentralized exchange (DEX) trading volume, fees generated, and TVL to provide a clearer picture of each network’s performance.
Daily Active Addresses
Figure 3 – Daily Active Addresses on Smart-Contract Platforms in 2024
Source: Artemis, 21Shares
As shown in Figure 3 above, Solana emerged as a forerunner in user engagement, boasting the largest user base of 6.5M users driven by its trifecta of low fees, rapid transactions, and a user-friendly interface. A perfect storm for the memecoin frenzy that swept through the network this year, with more than 3.5M tokens launched on the memecoin factory pump.fun alone. Furthermore, Solana has become the preferred platform for the latest crypto trends, including tokens tied to AI-powered agents and DePIN protocols, as discussed earlier.
Similarly, Aptos has shown impressive user growth compared to other L1 blockchains like Avalanche, driven by its expanding DeFi ecosystem. Key developments fueling momentum include Blackrock’s BUIDL product expansion, the deployment of Tether’s USDT and Circle’s USDC on the network, and the upcoming integration of sBTC by Stacks. Together, these advancements are driving increased user enthusiasm and engagement across the network.
Ethereum, however, remains a formidable player, having effectively shifted a significant portion of its activity to L2 scaling solutions. This has resulted in almost 90% of transactions now occurring on L2s rather than the mainnet, underscoring the growing importance of scaling solutions as the execution layer for the legacy network. Despite this, L2s solutions have dramatically expanded Ethereum’s capabilities, achieving a 26-fold increase in throughput —382 transactions per second compared to 14 on the base layer—and attracting a user base of 2.6M, more than seven times Ethereum’s mainnet average of 350K users.
Decentralized Exchange Volume
Figure 4 – Decentralized Exchange Trading Volume on Smart-Contract Platforms in 2024
Source: Artemis, 21Shares
From a broader perspective, Ethereum and Solana dominate exchange activity, fueled by their thriving DeFi ecosystems. Ethereum has long maintained its top position, with the largest DeFi ecosystem boasting nearly $60B in TVL. Its financial applications have demonstrated remarkable resilience, withstanding multiple market challenges since 2020. In addition, Ethereum has been contributing almost 50% of all decentralized exchange (DEX) volume through the first three quarters of the year, until Solana flipped the script, as illustrated in Figure 4.
In fact, Solana has recently outpaced Ethereum across multiple metrics. For example, Solana’s DEX trading volume exceeded Ethereum’s by $40B in November, while its weekly DEX trading volume eclipsed Ethereum and all its Layer 2s combined during the final week of October. Additionally, three out of the top ten revenue-generating applications now operate on the Solana network. Notably, the Solana-based DEX Radyium generated $29B in trading volume over the last week, a 45% difference compared to Uniswap’s $20B. Furthermore, Solana-based platforms now account for three of the top ten DEXs, commanding over 40% of the total 24-hour trading volume across the entire crypto ecosystem.
Finally, while TON currently reports lower DEX volume and an underdeveloped DeFi ecosystem, its focus on simpler use cases has kept its TVL relatively modest. However, the upcoming Curve integration is expected to drive significant growth by enhancing stablecoin liquidity. Additionally, TON recently launched the testnet version of its bridging solution, enabling native Bitcoin transfers to its network. This breakthrough positions TON to tap into a vastly larger market, leveraging the $1.3T in dormant BTC.
Fees Generated
Figure 5 – Fees Generated by Smart-Contract Platforms in 2024
Source: Artemis, 21Shares
TON stands out among emerging platforms with its substantial network fees, driven by Telegram’s expansive Mini App ecosystem. This goes beyond crypto applications, integrating traditional services like ride-hailing and e-commerce, where TON-based assets are used for payments. Additionally, Telegram-centric offerings such as competitively priced global eSIMs, VPN solutions, and decentralized storage broaden its appeal, particularly to non-crypto-native users. All in all, this places TON as the third-highest fee-generating network compared to the other networks, which can be seen in Figure 8.
Alternatively, Solana has established itself as a fee-generating powerhouse, as depicted above in, Figure 5 with many leading dApps leveraging its high-speed, cost-effective blockchain. For example, the no-code memecoin creator platform Pump.fun has generated $220M in fees and attracted 150K users. Moreover, Solana-based protocols account for 50% of the top 15 fee-generating applications across all blockchains. Notably, trading bots Photon and BonkBot earn a combined $75M monthly, while Radium and staking provider Jito contribute $300M, collectively. This positioned Solana to currently generate 110% of Ethereum’s real economic value.
Finally, Ethereum’s recent Dencun upgrade led to a 90% reduction in L2 transaction costs. The upgrade introduced blobspace, an efficient data storage mechanism for L2 solutions. As this new system gains traction and approaches capacity, L2 transaction costs will gradually increase. This trend, already becoming apparent as shown below in Figure 6, suggests a potential resurgence in Ethereum’s mainnet revenue in the coming months.
Figure 6 – Ethereum Average Blob Count Per Block
Source: Dune Analytics, 21Shares
Total Value Locked
To recap, TVL serves as a crucial metric for financial ecosystems in the crypto space, analogous to assets under management in traditional finance.
Figure 7 – Total Value Locked in Smart-Contract Platforms in 2024
Source: Artemis, 21Shares
Ethereum, as the pioneer of DeFi, unsurprisingly maintains the largest TVL among all networks. However, the landscape is evolving rapidly.
Solana has emerged as a significant player, now commanding nearly 10% of DeFi’s TVL. This growth can be attributed to its seamless integration with traditional finance, expanding tokenization sector, and proliferation of payment-related use cases, as well as the surging maturity of its DeFi ecosystem.
Meanwhile, Avalanche continues to hold a substantial TVL, primarily due to its innovative subnet model that empowers businesses to create customizable networks with unprecedented control and flexibility. Consequently, Avalanche has become a hub for tokenization projects and institutional financial applications, both live and in development, as its network design effectively meets the business and privacy needs essential for TradFi.
In conclusion, these metrics provide a comprehensive view of the current standing and performance of various layer-1 blockchains. As seen in Figure 8, these platforms illustrate the diversity in blockchain usage patterns and provide insight into how each chain is positioned to compete in the landscape of blockchain-based applications. We believe there will not be “one chain to rule them all” and instead we will see a multi-chain future where certain chains are used over others for specific use cases.
Figure 8 – Summary of Key Metrics Across Smart-Contract Platforms
Source: Artemis, 21Shares
What’s happening this week?
Research Newsletter
Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com
Disclaimer
The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.
Navigating the Landscape of Global App Stores
AK8E ETF är en satsning på statsobligationer med förfall 2028
Fond från Xtrackers erbjuder tillgång till den hållbara fastighetsmarknaden
21Shares Ripple XRP ETP når 100 MUSD i förvaltad volym
Staking is now available for 21Shares Ethereum Core ETP
Börshandlade fonder med månatlig utdelning
Vilka börshandlade fonder lockade mest i oktober 2024?
Post-election recap: Three takeaways for crypto investors
JEQP ETF spårar Nasdaq-100 och ger en månadsvis utdelning
Lansering av två Franklin Emerging Markets UCITS ETFer
-
Nyheter3 veckor sedanBörshandlade fonder med månatlig utdelning
-
Nyheter3 veckor sedanVilka börshandlade fonder lockade mest i oktober 2024?
-
Nyheter1 vecka sedanPost-election recap: Three takeaways for crypto investors
-
Nyheter2 veckor sedanJEQP ETF spårar Nasdaq-100 och ger en månadsvis utdelning
-
Nyheter4 veckor sedanLansering av två Franklin Emerging Markets UCITS ETFer
-
Nyheter4 veckor sedanFed comments on DeFi, ETF flows jump, and report highlights crypto’s maturation
-
Nyheter2 veckor sedanJEIP ETF spårar amerikanska aktier och ger en månadsvis utdelning
-
Nyheter2 veckor sedanNya ETFer från J.P. Morgan ger tillgång till amerikanska företag i kombination med en överlagringsstrategi
